Well, I am not sure that is the direction the arrow of causality works in this case.
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Paradox Games has announced today their new game “Millennia”, a semi-historical turn-based 4X game. Find out more here .
I think I may have got something I missed before. Is your point that the money that pays for the electricity comes not from the transaction fees, but from people coming in and investing new money. Since the the emitted coins given to miners is represented by the blue line on the below graph, or the increase in the purple line , that represents the "cost", along with any change in the price of the coins?
Spoiler Some lines about crypto, including total monero in circulation by date :
EnglishEdward
Deity
Sounds strangely reminiscent of the old Ponzi...
The other day I learned about MMM Global, which I think is a currently ongoing massive open ponzi scheme. I learned via youtube below, or you can read the indescribably boring:
On its website, MMM Global unashamedly advertises itself as a scheme whereby new members “assist” older members by paying a fee to join. Older members are allowed to withdraw money after a certain period of time, and receive bonuses for encouraging others to sign up.
Spoiler 14 minute youtube about a current ongoing open ponzi scheme :
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All these crypto projects have a certain amount of vagueness and woo or whatever, but it seems this Worldcoin kind of takes it to new levels.
From their website you scan your iris:
There the questions start, like where does the money come from? But if you squint I guess you could see a system here.
Last year we heard a bit about it:
Then we find out how it works with China added:
They admit they cannot stop it
My real question though is how does it work in this day and age of image generation AIs? I am sure if I had a training set I could pump out iris scans at a healthy rate.
From their website you scan your iris:
sign up for World ID by visiting a Worldcoin Operator and verifying their unique personhood at an Orb.
Worldcoin Operators are individuals who operate Orbs all around the world and can earn Worldcoin or fiat currency by introducing Worldcoin to their communities and helping people securely sign up for World ID via the Orb.
There the questions start, like where does the money come from? But if you squint I guess you could see a system here.
Last year we heard a bit about it:
Reporting from BuzzFeed News and MIT Technology Review described some of the issues that Worldcoin has been encountering on its mission to scan the eyeballs of the world population, in exchange for nebulous promises of crypto. Although "Orb operators" have been out and about scanning eyeballs in countries around the world, those who've agreed to be scanned have only been offered a voucher for Worldcoin tokens and a promise that they may, someday, be redeemable for $20. Meanwhile, the company appears to be flouting data privacy laws and endangering operators of these Orbs, who have encountered threats from angry uncompensated users, and some of whom have been detained by law enforcement. Those who have agreed to have their eyes scanned have accused the company of "stealing their eyes", and fear how their biometric data may be used.
Then we find out how it works with China added:
Now, the project is facing reports that people in China, who are not allowed to sign up legitimately, have been purchasing iris scans from individuals in Africa and Southeast Asia in order to circumvent the restriction. According to the news outlet BlockBeats, Chinese individuals have been engaging in "eyeball speculation": buying biometric data scanned en masse from villagers in Cambodia, Kenya, and elsewhere by people who then sell it for $30 or less, allowing the buyer to receive the associated Worldcoin payout (currently ~$20).
They admit they cannot stop it
Worldcoin has said they are rolling out various measures to try to discourage this activity, including changing the in-person sign-up process. However, the project acknowledged that they have not figured out how to prevent this, writing: "Despite these precautions, it is important to acknowledge that they do not entirely safeguard against collusion or other attempts to bypass the one-person-one-proof principle. To address these challenges, innovative ideas in mechanism design and the attribution of social relationships will be necessary."
My real question though is how does it work in this day and age of image generation AIs? I am sure if I had a training set I could pump out iris scans at a healthy rate.
Soon everything will be faked!
RobAnybody
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Quoting myself from February...
Interestingly, despite all the negative press, they continue to rise: Bitcoin is now at $27,042; Etherium is at $1,818. They both had been a bit higher a few weeks ago, but still... my Beanie Babies are on the upswing. I have no idea what that means, or why it's happening. It's just interesting to note how their value doesn't seem to reflect anything - like, really anything.
We dumped our daughter's 100 or so beanie babies last year. Gave the to the local thrift store.
Is it the feds? 
Tornado Cash DAO suffers hostile takeover
A proposal ostensibly to penalize cheating network participants in the Tornado Cash crypto tumbler project successfully passed by DAO vote. However, the proposer had added an extra function, which they subsequently used to obtain 1.2 million votes. Now that they have more than the ~700,000 legitimate Tornado Cash votes, they have full control of the project.
The attacker has already drained locked votes and sold some of the $TORN tokens, which are governance tokens that both entitle the holder to a vote but also were being traded for $5–$7 around the time of the attack. The attacker has since tumbled 360 ETH (~$655,300) through Tornado Cash to obscure its final destination. Meanwhile, $TORN plummeted in value more than 30% as the attacker dumped the tokens.
The attacker now has full control over the DAO, which according to crypto security researcher Sam Sun grants them the ability to withdraw all of the locked votes (as they did), drain all of the tokens in the governance contract, and "brick" (make permanently non-functional) the router.
Tornado Cash DAO suffers hostile takeover
A proposal ostensibly to penalize cheating network participants in the Tornado Cash crypto tumbler project successfully passed by DAO vote. However, the proposer had added an extra function, which they subsequently used to obtain 1.2 million votes. Now that they have more than the ~700,000 legitimate Tornado Cash votes, they have full control of the project.
The attacker has already drained locked votes and sold some of the $TORN tokens, which are governance tokens that both entitle the holder to a vote but also were being traded for $5–$7 around the time of the attack. The attacker has since tumbled 360 ETH (~$655,300) through Tornado Cash to obscure its final destination. Meanwhile, $TORN plummeted in value more than 30% as the attacker dumped the tokens.
The attacker now has full control over the DAO, which according to crypto security researcher Sam Sun grants them the ability to withdraw all of the locked votes (as they did), drain all of the tokens in the governance contract, and "brick" (make permanently non-functional) the router.
MrCynical
Deity
You're on the right lines. Neither of these lines exactly maps to the cost, but the trends in them are connected to it. What I seemed to be unable to get across before was that the official "transaction fee" monero charges has nothing whatsoever to do with paying its running costs. To summarise how monero's electricity bill is actually paid for:
1) You make a transaction, using the monero system and blockchain.
2) A large amount of computing cycles are required to process it due to the inherent inefficiency of blockchain systems. The actual computations are run by machines operated by miners, requiring significant amounts of electricity.
3) The miners pay the electricity supplier, using conventional currencies. Exactly how much for a single transaction is a little difficult to pin down, but the lowest estimate I've seen was $1.88, with some unrealistically low estimates of energy costs. The few papers available suggest a number more like 10 times that. Let's say about the miners end up paying about $5 per transaction to the electricity supplier. The exact number isn't that important. The key point is that it is vastly larger than the fraction of a cent monero's official "transaction fee" consists of - which is the giveaway that the person making the transaction isn't actually the one paying for the power costs. The electricity cost is essentially independent of the size of the monetary transaction.
4) The miners are obviously not paying your transaction fees for their own amusement. They are in turn compensated with freshly minted monero tokens (XMR). The amount of these tokens awarded per transaction is very deliberately set to be just enough to make a slim profit, if they are rapidly sold for conventional currencies, given current XMR token prices and electricity market rates.
5) Due to the inflationary effect, each one of these new tokens minted to reward the miners reduces the value of all existing tokens slightly. Effectively, each time you make a transaction, the value of XMR drops a tiny amount. That value ultimately ends up in the pocket of the electricity suppliers.
6) In practice, the electricity costs are therefore being paid for collectively by all holders of the monero tokens, by slightly devaluing their tokens each time a transaction is made. Note again - the official "transaction fee" is of no relevance to anything in this system, and is a rounding error compared to the amount that's ending up in the pockets of the electricity suppliers.
7) Now, if this was the only pressure on the XMR price, then the token's value would diminish to zero over time. All of the value in the system would be converted back to conventional currencies in the pockets of the electricity suppliers, with the miners taking a small cut for themselves. Therefore there has to be an opposing process converting conventional currency into monero tokens to keep the market price propped up. This opposing force is not the "transaction fees". As established, these are somewhere on the order of 10,000 to 100,000 times too small to balance the system.
8) The actual influx of value is due to people speculatively purchasing the monero token using conventional currencies, in the hope it will massively increase in the way that Bitcoin did - for a while anyway. This has nothing to do with the supposed financial transaction processing side of things. They're just buying the tokens to hold, in the hope they'll increase in value. It's the same speculation that every crypto-token relies on.
9) It is a mathematical certainty that on average the people speculatively buying monero tokens are losing money. The monero token value has been (by the fairly loose standards of cryptocurrencies) stable-ish for a few years. There is a constant drain of value at the bottom of the system into the pockets of the electricity suppliers (and to a lesser extent the miners). While it is somewhat obfusticated by doing it indirectly via inflation, that value is ultimately being paid by these speculators losing money. They put conventional currencies into the system to buy tokens which do not "go to the moon" as they're hoping, but are instead constantly being devalued to pay the electricity costs.
10) Yes, there will be some fraction of these speculators who happen to buy and sell at the troughs and peaks and turn a small profit. They are the lucky ones. Like a lottery. Sure, a few people come out ahead, but it's mathematically required for it to be a loss for speculators on average, or the whole system collapses.
OK, so now we've established how monero pays its electricity bills, what actually "is" monero? The financial transaction processing element is paid for not by fees, but is effectively being subsidized by the speculators losing money. So can we call it a financial transaction system? I don't think so. Every transaction is effectively a loss in value for the monero system as a whole. The more people use it for that purpose, the higher the power costs, and the more speculators have to lose money to keep the whole thing propped up. The ideal situation for monero is if no one actually uses the transaction side of things at all, since it keeps costs down. It's like having, say a "coffee shop" that loses money on every cup, and is most profitable if they don't sell any coffee at all.
If you're paying attention, you'll realize that if you just want a decentralized blockchain system for processing financial transactions, the monero token is completely unnecessary. You could run a system which charges the user the, say, $5 per transaction actually required to cover the costs, and pays the miners in conventional currency to pass onto the power suppliers. It wouldn't be very appealing, as it's a lot more expensive and inconvenient than existing payment systems, but it would be what an honest blockchain transaction processing system would look like. The token only serves to complicate and obscure things, so speculators think that it makes sense to throw conventional currency into the system. Such a system has a limit on how big it can be scaled up. Sooner or later you will run out of chumps who will make the mathematically irrational decision to buy the tokens, or the chumps will run out of money. The "transaction fee" is a similar smokescreen, to try and pass off monero as something other than just speculating on a cryptotoken. All cryptotokens these days try to come up with some unique selling point to pretend they're more than just speculation. It's particularly silly when they try to use environmentalism as a hook, given they're always a huge waste of energy.
I'll leave discussing the ethics of designing a payments processing system that is essentially subsidized by other people's mathematical irrationality to someone else. I suppose you could do that without crypto, thinking about it. Imagine if the UK national lottery, instead of throwing money at charities as a moral justification for its existence, instead just paid everyone's visa fees. That would effectively be the same concept. Except I don't think anyone at all wins big buying monero tokens.
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warpus
In pork I trust
Like I said, it's up to you whether you'd like to remain ignorant on the subject or not. Your position is that the blockchain has absolutely zero utility of any kind. Those are the words of an ignorant person. It's super easy to realize this if you do a little bit of research and actually read what's presented to you.
Cheers
RobAnybody
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I thank you for this in-depth explanation. But it kinda helps illustrate my point in regards to Crypto, because I don't care about any of it. No offense meant - hear me out as to why, please! I am glad that people like you explore it to this depth. I read your post & didn't even understand half of it. I am not trying to insult you, or denigrate the thought you've put it into...
But... it helps illustrate *my* mindset as well. They are just speculative assets to me. Out of curiosity, do people like me, who literally only focus on the present value, annoy you, or are we "useful idiots"? I will not be insulted by either response - I'm genuinely curious.
Moriarte
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Most people treat it like you do, I think. Including most of the top hedge fund managers. Not many people care for current or future utility, intricacies of value creation, etc. People see a hyped up pyramid, they throw lunch money at it. I walk into “cointelegraph” or any other crypto publication - headlines discuss next coin in line “to the moon” and the big news that Musk bought some Doge. Walk into Wall Street Journal or Marketsmith, Yahoo, they are full of exactly the same fortune telling stuff. This “stuff” is about people in general, not crypto.
Whatever the implied faults of the people speculating on value of crypto or stocks, I, for one, think crypto is a net positive for many. First of all, during the last decade people across the world flocked from failed currencies (like Turkish lyra) into crypto currencies. Thus people haven’t lost value due to geopolitical games or severe mismanagement of the economies. The value of Lyra went from .4 to .04 in the last ten years. (10x depreciation) While bitcoin appreciated thousands of percents across the same time span. Citizens of numerous African failed states will attest to the same thing. They kept fruits of their labor, while others, who entrusted hard earned money to highly respected warlords and their centralised monetary establishments backed by IMF and WB - lost money.
Secondly, for all it’s faults, crypto can’t be confiscated that easily. You do anything that upsets law and order, or appear to do anything that upsets law and order, you cross the road of a big economic powerhouse with your small kiosk - money is frozen in the bank account the same day. No questions asked, no doubts, no propositions to explain yourself, just snatched from the hands immediately. For some odd reason, I don’t like this idea.
Moriarte
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The pyramid hotel!!!
BITCOIN TOWER, the first one in the world, will be built in Dubai
The world's first Bitcoin Tower will be built in Dubai and will be the first hotel that gives you back the money you paid, plus interest
ffnews.com
FriendlyFire
Codex WMDicanious
If you are in for a quick profit that sure it dosnt matter, plenty of people brought into crypto to make money without understanding anything beyond that you can make money,
People long term investors generally do serious research into the viability of success
Especially given the number of SCAMs but generally with startup techs there is a large element of risk
RobAnybody
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RobAnybody
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Sorry for double-posting, but I do want to address this....
That's me. I actually got in early enough that I am still "Up" (granted, after that big crash a few months ago: I actually got Down for a bit, but given the rebound, I am back Up). So that's me: just someone who put some money (that I can afford to lose) into it hoping to make more money. I appreciate the discussion.
I shall try, but just to highlight how much this is the blind leading the blind@Samson: Can you explain why you don't often see them overlapping? I don't understand what that graph is showing at all.
It seems to me you asking me how this works is a bit like a forex trader asking someone who has popped into the Bureau de Change for their holiday money how the markets work.
The x axis is price of 1 XMR in BTC. The dots are offers to buy one or the other, red is buying XMR green is selling XMR. Normally there is a gap between the prices, as there is on bisq this morning (see below). This is the spread, and it is equivalent to the difference between the buy and sell price in a Bureau de Change.
The overlap meant there were offers to sell XMR for less than there was offers to buy it, so in the absence of transaction fees one could have made a pure profit. I have to suspect it is to do with the increased transaction fees on bitcoin, but I know nothing.
Spoiler Pictures :
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MrCynical
Deity
Part of the confusion is the way the first graph was cropped left the y-axis with no label. I can hear my old maths teacher seething.
I wouldn't read too much into it. From what I can see, a very small fraction of offers were (minutely) cheaper than the tokens could immediately be sold for to buyers. So yes, you could briefly make a tiny profit just as a middle-man buying and selling, but I expect this resolved quite quickly. Crypto markets are not 100% rational (by a long way), so anomalies like this do crop up from time to time. The actual amount of profit it's possible to make from things like this is small (limited by the total volume of "irrational" offers), and you need to have the money to buy tokens in bulk to make it work.
I wouldn't read too much into it. From what I can see, a very small fraction of offers were (minutely) cheaper than the tokens could immediately be sold for to buyers. So yes, you could briefly make a tiny profit just as a middle-man buying and selling, but I expect this resolved quite quickly. Crypto markets are not 100% rational (by a long way), so anomalies like this do crop up from time to time. The actual amount of profit it's possible to make from things like this is small (limited by the total volume of "irrational" offers), and you need to have the money to buy tokens in bulk to make it work.
